By Rory D. Sweeney
WILMINGTON, Del. — The coalition of municipal utilities and cooperatives seeking a review of PJM’s capacity construct decided last week to make revisions before approaching stakeholders for approval of its problem statement and issue charge.
American Municipal Power’s Ed Tatum said the coalition is incorporating feedback from other stakeholders. It plans to present a revised proposal at October’s Markets and Reliability Committee meeting.
Tatum conducted an informal poll of the MRC attendees and found about a dozen members willing to say the proposal was too broad. No stakeholders raised their hands when Tatum asked if they believed PJM’s capacity construct was immune to the policy changes of its member states.
Stakeholders have previously expressed concern that energy policy decisions made by states — from renewable energy production goals to utility reregulation — might disrupt PJM’s complex marketplace.
Delaware Municipal Electric Corp., Old Dominion Electric Cooperative, the PJM Public Power Coalition, the Public Power Association of New Jersey and retailer Direct Energy have signed on as cosponsors of AMP’s initiative, which was introduced at the August MRC meeting. (See Proposal to Revisit PJM Capacity Model Receives Tepid Response.)
Stakeholders largely applauded withdrawal of the proposal last week, saying it requested too much change too soon. “We haven’t even gotten through the transition for [Capacity Performance] yet where we have full CP,” said Calpine’s David “Scarp” Scarpignato. “It seems premature to be discussing a whole new concept.”
Susan Bruce, who represents the PJM Industrial Customer Coalition, expressed appreciation for the coalition’s willingness to consider other perspectives on the issue. “No one would call us a defender of PJM capacity markets, but at the same time, the idea of additional uncertainty and change … was something, from a business perspective, that was difficult for our clients to get our head around,” she said.
Exelon’s Jason Barker said his company is unlikely to support redesigning the entire capacity market, likening it to rewriting the U.S. Constitution rather than just individual laws. But he said it could be supportive of “something that’s a little more surgical.”
“Given the strong push by local, state and federal governments to recognize the environmental impacts of our industry, that seems like something that’s ripe for discussion,” he said. “That seems like an issue that has not been addressed” by PJM’s current system.
Continuing the medical analogy, Marji Philips of Direct Energy argued the issue should be addressed comprehensively rather than in pieces.
“I’m sympathetic to the fact that people thought this was overreaching, but the reality is we are amending CP by small cuts. We were suggesting that we just operate on the patient holistically instead of limb by limb,” she said. “I have to say, every one of us is guilty around here of claiming that we want regulatory certainty until a rule is bad for us, and then we want it changed right away, so unfortunately our reality is there is no regulatory certainty.”